Australand gets realistic about Hope

Listed
Australand Property Group
is the latest developer trying to opt out of the oversupplied Hope Island property market in Queensland and has launched a campaign to sell its waterfront residential estate, Cova.

A marketing campaign for the remaining 25 hectares at Cova starts this week, buoyed by stabilisation of the Gold Coast property market and ­multimillion-dollar sales at the Pacific Beach site in Surfers Paradise and ­Sheraton Mirage.

Australand executive general manager residential, Rod Fehring, said the site was being sold in conjunction with the estate’s 50:50 partner, Suncorp.

Australand booked a $25 million impairment on its portion of the asset in its 2008-09 results, bringing it in line with market values, Mr Fehring said.

“There’s no disagreement with Suncorp. We believe we’ve brought the asset to market value and we are wondering if the market agrees," Mr Fehring said.

“Will there be more impairments? No, because of the impairments we’ve already taken. Having said that, we believe we can’t ignore the market and the fact is that Hope Island is oversupplied, as is that northern part of the Gold Coast.

“We think there may be a need to do a redesign of the product mix to meet the market, so if we are able to find a new owner, that’s all well and good, but our job is to get on with it anyway."

The property market in the exclusive north Gold Coast region has been hampered by numerous developers falling into receivership and a glut of brand new or yet to be completed stock on the market.

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Prices at Hope Island appear to have stabilised since reaching a low in July last year, having fallen between 25 per cent and 50 per cent, according to analysts and agents.

A number of units have successfully sold at auction this month and prices have improved 5 per cent from their lowest point in November.

Cova, designed to provide 600 dwellings, was to have a recreation centre and a 99-berth marina.

Colliers International director of project marketing, Brinton Keath, is handling the sales campaign. He said it was the largest Gold Coast waterfront offering in more than a decade, with direct ocean access and an approved master plan for the construction of 40 dwellings a hectare and medium-density housing.

Mr Keath will take offers to purchase until May 27.

At the end-of-year results in mid-2009, Australand managing director
Bob Johnston
admitted the Gold Coast was suffering an oversupply of product, that land was difficult to sell and had been repriced.

At this month’s Australand annual general meeting, Mr Johnston said Australand’s residential division had been affected by impairments and low-margin inventory.

Australand bought the 31-hectare site from Gold Coast developer Craig Gore for $90 million in 2003.

Companies associated with Mr Gore’s project, Ilanah Aqua, adjacent to Cova, are in the hands of ­receivers and have been selling at ­reduced prices.

Mr Fehring said proceeds from the sale of Cova would be put into other projects in south-east Queensland.

“The reality is we are a bit under­represented in south-east Queensland and from that point of view I would be surprised if we weren’t more active there," Mr Fehring said.

Australand announced the acquisition of Northshore Hamilton, in Brisbane, after winning the expressions of interest campaign for the 1.8-hectare site and taking options over a future 4.5 hectares of land within the precinct.

Stage one will provide 140 dwellings and the remaining land is earmarked for another 850 properties.

Australand has also started construction on its Yungaba site at Kangaroo Point in Brisbane, which is to be ­released in stages over six years.